NEW DELHI (Reuters) - Leaders of India and the European
Union will attempt to push forward a proposed free trade deal
and seek common ground on tackling climate change during a
summit later this week, officials said on Monday.

Indian Prime Minister Manmohan Singh and President of the
European Commission Jose Manuel Barroso will also talk about
energy cooperation and events in neighboring Pakistan when they
meet on Friday.

"The full potential of India-EU relations has not been
realized. The free trade agreement will give a new impetus to
the relations between Europe and India," Daniele Smadja, EU
ambassador in India, told a news conference.

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The EU is India's largest trading partner, accounting for a
fifth of India's total trade, and is also one of its most
important sources of foreign investment.

Smadja said the two sides would hold wide-ranging
discussions related to the free trade and investment pact, but
did not give a timeframe for completion of negotiations.

Despite growing trade ties the two sides are trying to iron
out differences in several areas, among them remaining duties
on wines and spirits, food safety and industrial standards.

India in July scrapped a hefty additional customs duty on
imported wines and spirits, a particular annoyance to the EU,
with its Scottish whisky makers and French vineyards.

EU Trade Commissioner Peter Mandelson will also be in New
Delhi, where earlier this year he and other trade negotiators
met to bridge differences over the Doha round of free trade
talks.

India, which is negotiating a similar free trade agreement
with the 10-member Association of South East Asian Nations
(ASEAN), hopes to wrap up the EU deal by the end of 2008.

The European Union is increasingly drawing up a web of free
trade pacts in Asia after the United States and Japan made
inroads to tap into the high growth potential of these
economies.

European trade officials want to deepen discussions on
sensitive areas with India such as removing barriers to trade
in services, intellectual property protection and public
procurement.

Smadja said despite differences over how to deal with
climate change, the EU and India would air their views ahead of
December's conference in Bali to formulate a replacement for
the Kyoto Protocol.

"Climate change will be high on the agenda," she said.

India has refused to commit to emissions targets, saying it
must use more energy to lift its millions out of poverty. The
government says this is something rich nations, which have
burnt fossil fuels unhindered for over a century, should
understand.